Guest Post: Investing Millennial Style

Technology has a profound effect on how every generation thinks and achieves goals. Parents of our generation have been taught new ways to raise us, just as their parents learned new ways to raise them. So does that mean millennials will have a different outlook on investing than their predecessors? The answer is yes. Social media has grown and has become our preferred method of collecting information about investments. Advice about companies and stocks used to be exchanged on the golf course, now it is passed on through social media. New apps and websites are being created to share information between the savvy investor and the new kid on the block. Surveys have even shown that investors under the age of 35 are more likely to use online tools to help manage their investments. With these tools, investors can look over their accounts at any time instead of waiting for the quarterly reports to come in the mail.

With all investments come risk. Millennials have the idea that we should have millions of dollars in our bank accounts by the time we are 30. With this mind set, it’s not hard to believe that losing money is one of the most frightening things for our generation. With that constant fear looming over us, it’s no wonder most millennials are good at saving money and prefer cash to stock for long term investment. Millennials have almost twice the amount of cash in their portfolios than baby boomers and tend to invest in short term, low risk investments. This leaves them at a disadvantage, as they do not have the benefit of high interest rates. A quarter of those on the older end of the millennial spectrum, who have retirement accounts, have already dipped into the money. On top of that, most millennials don’t particularly care how the market is doing as long as they are saving enough cash to reach their financial goals.

Millennials love technology, they use it for everything. Honestly, our generation would be lost without it. So when our generation thinks about what to invest in, naturally technology comes to mind. So many new and exciting innovations are created almost daily that it seems we will never come to the end of technological advancement. Millennials are one hundred percent more likely to invest in technology than previous generations.

Lastly, and unfortunately, millennials are less likely to invest because their parents are more lenient when it comes to finances. Parents from Generation X are more likely than Baby Boomers to provide financial assistance to their children and are happy to do so. This doesn’t give millennials the chance to understand the value of money when it so easily handed to them.

Finances are something we rarely think about but are constantly conscious of. Whether it be investing, saving, or having it handed to you, millennials have a new way of thinking about how finances affect them.